An AI for an AI: Intelligo Uses Artificial Intelligence to Uncover Facts as Fraudulent Technology Claims Multiply

The SEC’s latest target? AI washing – the practice of making false artificial intelligence claims. Companies are embellishing technology capabilities to bolster otherwise flimsy business models. The anecdote for spotting these hard to detect practices? You guessed it, more AI. It takes one to know one and with Intelligo’s AI powered due diligence, AI washing is easily spotted and exposed before you sign on the dotted line. 

Take Joonko for example, a recent recruitment startup that boasted using AI to connect diverse job seekers to potential employers in order to fulfill their diversity, equity, and inclusion standards. Founded by Israeli citizen, Ilit Raz who served as Joonko’s CEO, the startup was described to investors as a platform that used AI to directly connect job candidates with employers. 

However, according to a complaint filed by the SEC, “Joonko did not have the aforementioned capabilities to connect customers with diverse candidates, and its technology was not as advanced as Raz claimed.”

As the SEC dug into Joonko’s performance and capabilities, they quickly uncovered a string of false information and holes in Joonko’s fundraising presentation used to lure in investors. The startup was targeted by the SEC for fraudulent practices, including fake testimonials, phony contracts, and fabricated bank statements. Joonko falsely reported having over 100 customers, some of which were named as Fortune 500 companies, claimed that Joonko was valued at more than $1 million, and had over 100,000 potential applicants enrolled with the company. 

Raz allegedly fabricated testimonials from multiple companies backing the success and competency of Joonko’s AI powered technology in sourcing diverse candidates. When questioned by one investor, Raz produced falsified bank statements and forged contracts. Her scheme swindled investors out of at least $21 million, however the SEC’s recent discoveries quickly took the air out of Raz’s tires. 

Federal prosecutors in Manhattan have also cracked down on Raz charging her with securities and wire fraud. If convicted Raz could face up to 20 years in prison for each charge according to the Justice Department. Joonko is currently bankrupt and defunct. And while Joonko’s investors conducted comprehensive background checks and no red flags were uncovered, fraud cases like this don't occur in a vacuum and due diligence can help uncover breadcrumbs for potential landmines down the road. With new AI engineered companies popping up every day, investors can lean on Intelligo’s level of scrutiny to double check facts and figures, ensuring the startup is legit, the people are who they say they are, and the registration is accurate. Additionally pointing to any past legal cases that could signify a pattern. Intelligo combines AI with human analysts to scrub for data and expose any inconsistencies or empty promises. Schedule your free demo today.